Setting up a subsidiary in Spain for a French company is a strategic project that requires meticulous planning.

Here is a detailed guide to the essential steps for creating a limited liability company (NEWCO) in Spain, along with a practical checklist.
We assume that the NEWCO will have as its sole shareholder a company incorporated under French law, represented by its director, who is also a French national.

1. Important Prerequisite: Prepare the Ground!

The French parent company and its representative must first obtain a NIF and NIE respectively (these are tax identification numbers without which no procedures are possible in Spain).

It should also be noted that any French national who is granted a corporate office or powers within the NEWCO must possess the crucial NIE.

For individuals

Experience tells us that the most efficient way is to go through the consular channels. Indeed, there are several Spanish consulates in France, allowing French citizens residing within the consulate's jurisdiction to complete this process. Simply make an appointment online and go to the consulate on the scheduled day to submit the completed forms and pay the fee. The NIE (Foreigner Identification Number) is then received by mail within approximately three weeks.

For legal entities

The NIF (Spanish tax identification number) can only be obtained in Spain. Therefore, you will need to authorize us to obtain this number. We will need to be in possession of the company's registration certificate (Kbis) and articles of association, apostilled and translated by a certified translator.

These documents are obtained from the commercial register in whose jurisdiction the French company is registered. It is necessary to obtain the documents directly from the register (please note that downloaded photocopies cannot be apostilled).

An apostille is a seal affixed by the territorially competent Court of Appeal, which gives indisputable validity to an official French document abroad. This process can be completed by mail or by visiting the apostille registry in person.

It will also be necessary to obtain information regarding the beneficial owners of the sole shareholder of NEWCO.

All these preliminary steps require between one and two months of processing time and close collaboration between the client and the law firm.

Indeed, without these documents (company registration certificate, articles of association), tax identification number (NIF), and business identification number (NIE), it is not possible to proceed to the initial stages of company formation in Spain.

We have witnessed significant delays in company formations in Spain. These delays stem from a lack of foresight and coordination among the various stakeholders.

From the outset of the project, we provide our clients with a comprehensive list of the steps, procedures, and timelines to be followed to avoid any unforeseen problems.

2. Obtaining the Certificate of Availability for NEWCO's Company Name

First and foremost, it is necessary to verify the availability of the desired name for NEWCO with the Central Commercial Registry in Spain (Madrid). This certificate is valid for three months and must be renewed if the company is not incorporated within this period.

In France, on the other hand, there is no similar requirement when creating a company, although it is strongly recommended to conduct a prior art search.

3. Opening a Bank Account in Spain and Depositing Share Capital

A bank account must be opened with a Spanish bank, where the share capital will be deposited. The minimum share capital in Spain is €3,000, and the bank issues a certificate that the notary will attach to the official deed of incorporation.

In France, the minimum share capital for company formation is €1.

4. Preparation of the Company's Articles of Incorporation and Bylaws in Collaboration with a Notary

Our firm collaborates with a notary for the drafting of the authentic instrument of incorporation and the company's bylaws. The beneficial ownership certificate must also be prepared, in accordance with Spanish law (Law 10/2010 and Royal Decree 304/2014).

In Spain, unlike in France, all corporate law procedures must be executed before a notary. This includes everything from company formation and delegation of powers to changes of registered office, capital increases, mergers, etc.

A provisional NIF (Tax Identification Number) is required before the signing of the authentic instrument. The notary handles this formality for the NEWCO.

After the company is registered, the final NIF for the NEWCO must be obtained within one month, and the company must be registered with the tax authorities.

5. Submission of the Foreign Investment Declaration (Form D1A)

The foreign investment declaration must be submitted to the State Secretariat for Trade in Spain.

6. Signing the Notarial Deed of Incorporation of NEWCO before a Notary

In our scenario, the individual representative of the sole shareholder will need to travel to Spain in person to sign the notarial deed of incorporation and the declaration of beneficial ownership before a Spanish notary.

If this is not possible, we can represent them at the signing of the notarial deed. For this, we will need a notarized power of attorney, apostilled (if this power of attorney is issued by a French notary).

A legal specialist will then submit the entire file to the Commercial Registry for company registration. This process takes approximately one month.

A tax return (Form 600) must be filed with the tax authorities. Currently, company formation is exempt from this tax in Spain.

7. Obtaining the Company's Electronic Certificate

Once registered, the company must obtain an electronic certificate for its official communications with the Spanish authorities.

Here again, this process must be planned in advance, and at the time of signing at the notary's office, it is essential to grant power of attorney to the NEWCO accountant in Spain.

8. Legalization of the Register of Shareholders

The register of shareholders must be legalized at the Commercial Registry within 4 months of the company's incorporation.

9. Registration with Social Security

If you wish to hire employees in Spain, company registration with Social Security is mandatory.

Just like the electronic certificate, this registration must be planned in advance, and at the time of signing at the notary's office, you must grant power of attorney to the accountant of NEWCO in Spain. Collaboration between the various stakeholders involved in the company's creation is essential for the success of your project.

10. Granting Powers of Attorney

If the NEWCO manager is based in France, it will be necessary, for the proper functioning of the subsidiary, to delegate powers of attorney to one or more individuals residing in Spain or traveling there frequently.

Please refer to point 1 of this checklist regarding obtaining a NIE (Foreigner Identification Number) for the authorized representatives.

Note that in Spain, unlike in France, delegation of signature authority does not exist. For any power of attorney to be valid, it must be executed before a notary and registered with the Commercial Registry to be enforceable against third parties.